Quest CO 2 Pipeline Operations Report 2016

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1 Controlled Document Quest CCS Project Quest CO 2 Pipeline Operations Report 2016 Project Quest CCS Project Document Title Quest CO 2 Pipeline Operations Report 2016 Document Number Document Revision 2 Document Status Document Type Control ID Owner / Authors New Adella Domm/Jordan Houtstra Issue Date July 24, 2017 Expiry Date ECCN None None Security Classification Disclosure None Revision History shown on next page

2 Revision History REVISION STATUS APPROVAL Rev. Date Description Originator Reviewer Approver 0 1 February 24, 2016 February 24, July 24, 2017 Issued for Annual Report Issued for Annual Report Updated to address deficiencies from GoA Stephen Tessarolo Adella Domm Jordan Houtstra Sofia Karmali Wim Guijt Sarah Kassam Signatures for this revision Date Role Name Signature or electronic reference ( ) Summary This document summarizes the operation of the Quest CO2 pipeline in 2016 to satisfy the post-startup requirements of sections 2.1, 2.2, and 2.3 of the annual report. Keywords Quest, CCS, CO2, pipeline DCAF Authorities Date Role Name Signature or electronic reference ( )

3 TABLE OF CONTENTS 1. PIPELINE COMMISSIONING SUMMARY Cleaning, Dewatering, Dry-out First Fill and Startup OPERATING SUMMARY Capacity Composition, Operating Conditions, Phase Behavior Operating Issues and Lessons Learned PIPELINE INSPECTION AND MAINTENANCE CO2 PIPELINE INSTALLED DEVIATIONS FROM DETAILED DESIGN... 9 APPENDIX A: QUEST PIPELINE FIRST FILL PROCEDURE... 10

4 1. PIPELINE COMMISSIONING SUMMARY The CO2 pipeline was cleaned, dewatered and dried in Prior to first fill, the pipeline was being preserved by a low pressure nitrogen pad. The pipeline first fill with CO2 and pressure up prior to injection occurred August 19 th through 22 nd, Cleaning, Dewatering, Dry-out Cleaning, dewatering and drying activities were undertaken by first running brush pigs through the line followed by foam pigs. Multiple pig trains were first pushed by dry air, followed by N2. In total, roughly 600 pigs were run through each pipeline section, until the penetration of debris into the foam pigs met the ¼ spec. The final water dew point achieved was -48 C (target -45 C) in October First Fill and Startup Filling activities for the pipeline were only conducted during the day to minimize the impact to residents living near the pipeline at night due to noise concerns with venting CO2. The initial fill of the pipeline was achieved by: 1) The low pressure N2 pad was displaced with low pressure CO2 from the compressor (pipeline pressure ~0.2 MPag during N2 displacement). The N2 was vented from the line until the composition changed to predominantly CO2, as measured by a portable gas detector. 2) The line pressure was increased to 4 MPag (gas phase CO2) and left to stabilize for roughly 24 hours to equalize temperatures and pressure across the line, as well as provide an opportunity for leak checking of the system. Wellhead pressure was equalized with the main line at this pressure level to minimize the pressure drop across the wellsite choke (flow valve) during initial injection. 3) Line pressure was then increased to 10 MPag (dense phase CO2) prior to commencing with injection. A copy of the operations procedure has been included in Appendix A. 2. OPERATING SUMMARY The following sections summarize the operating data obtained from Capacity The pipeline, as designed, was provided with significantly more capacity than required for day to day operation of the Quest asset (2.2 Mt/a installed vs 1.2 Mt/a required on a

5 regular basis). Figure 1 below shows the daily averaged throughput in the line since commissioning in August The pipeline has demonstrated sufficient performance at or above the 1.2 Mt/a nameplate. Flow reduction in March/April 2016 was a result of reduced CO2 capture due to low hydrogen demand at the Upgrader/Refinery. 1.4 Pipeline Flow Rate 1.2 Pipeline Inlet Flow (Mt/a) Aug Nov Feb May Aug Nov-16 Figure 1: Pipeline Inlet Flow Rate (Mt/a) 2.2. Composition, Operating Conditions, Phase Behavior The pipeline composition was fairly consistent during the operating period. The average annual composition has been indicated in Table 1 below. The composition compares well to the estimated composition from the design phase. Table 1: Annual average pipeline composition Component Actual Operating 2015 (vol%) Actual Operating 2016 (vol%) CO H CH CO N H2O

6 Table 2: Monthly average pipeline composition MONTHLY DATA Injection Stream Content (Volume %) CO2 H2 CH4 CO H2O Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The pipeline water content was maintained on spec easily. Refer to the document Quest CO2 Dehydration Performance for more information on water content over the reporting period. The average content on volume basis was 46 ppm for 2015 and 55 ppm in 2016 and 19 ppm for 2015 and 23 ppm for 2016 on a mass basis. This was well within the winter specification of 4 lb / MMScf (84 ppmv, 35 ppmw). Since commissioning, the pipeline inlet pressure has been on average 9.7 MPag (9700 kpag) with an average pressure drop of around 0.6 MPa. Figure 2 below shows the daily average inlet pressure to the pipeline, and the average pressure drop from inlet to each wellsite in service.

7 12000 Pipeline Inlet Pressure DP to 7-11 DP to Pipeline Inlet Pressure (kpag) Pipeline Pressure Drop (kpa) 0 22-Aug Nov Feb May Aug Nov-16 Figure 2: Pipeline Inlet Pressure and Pressure Drop to Each Wellsite The temperature profile has been included in Figure 3. The inlet temperature for most of the year was maintained around 43 C, while the outlet temperature, depending on the wellsite, rate, and ambient conditions, was typically in the 8-20 C range. The further wellsite, 8-19, was on average 3-5 C cooler than 7-11 due to additional ambient heat loss over the extra line length. 0

8 Wellsite Temperatures ( ( C) 7-11 Inlet Temperature 8-19 Inlet Temperature 7-11 WHT 8-19 WHT Pipeline Inlet Temperature Aug Nov Feb May Aug Nov Pipeline Inlet Temperature ( ( C) Figure 3: Pipeline Inlet Temperature and Temperatures at each Wellsite Based on the process data in Figures 2 and 3, and the composition in Table 1, it can be concluded that the phase of the CO2 leaving the Scotford site is in the supercritical phase (dense phase), and arriving at the wellsites the CO2 is in the liquid phase (also referred to as dense phase typically in industry) since the pressure is above the critical pressure, but the temperature is below the critical temperature. This phase behavior held true for all operating periods in 2015, with the exception of the initial pressure up activities prior to August 23 rd Operating Issues and Lessons Learned During the first fill, there was no acoustic or visual changes noticed when the vented stream changed from nitrogen to CO2. This was assessed to be due to venting dry CO2 (no moisture) while the fluid was in the vapour phase in the line, so there was not a significant Joule Thompson cooling effect of the CO2 causing condensation of water vapour in the air. A portable gas detector was used instead to check for the completion of the nitrogen displacement. The most significant reliability issue on the pipeline has been the power supply to the LBVs (line break valves). At LBV3 in particular, the solar panel/battery bank setup has had issues maintaining a decent charge on the batteries to manage nighttime operation in the winter during extended periods with overcast conditions. The problems were worst at LBV3 due to solar panel shading, and under-cycling the battery voltage leading to poor battery performance. This resulted in several nearloss of power events, and one actual pipeline trip due to closure of LBV3 because the power to the solenoid had dropped off. In 2016, methanol fuel cells were

9 installed at each LBV. These fuel cells provide supplemental charge to the LBV battery bank so that there is sufficient power during nighttime and overcast conditions. Actuation of the flow valve at each wellsite was done using a supply of compressed nitrogen. The style of valve in use was found to consume significant amounts of nitrogen when making moves to control tightly to a flow setpoint. This resulted in frequent deliveries of nitrogen bottles to the wellsites to mitigate the issue (not typically a problem when the valve is located at a large site, being fed off the common instrument air system). A change was made to the valve control scheme to adjust position when the flow measured was deviating from the setpoint by greater than ~2.5 tonnes/hr. The control scheme change along with some tuning of the valve itself, reduced nitrogen consumption to manageable levels. The control philosophy of the pipeline was to have the ability to run each wellsite flow valve (choke) in either pressure or flow control. Flow control has worked sufficiently, but controlling pipeline pressure directly off one of the wellsite flow valves proved difficult due to the large, pressurized volume of the 64 km line. Instead, the pipeline pressure was monitored by the panel operator, and flow setpoint adjustments were made to the wells when the pressure moved outside of the desired range. 3. PIPELINE INSPECTION AND MAINTENANCE In 2015, no post startup inspection activities took place (with the exception of verifying that the cathodic protection was functioning properly), and no significant maintenance activities have occurred. No wellsite particulate filter replacements were required due to the extensive cleaning campaign taken in Only a few minor issues were addressed, such as the flow valve nitrogen consumption issues, and replacement of batteries/removal of the anticlimb device on the communications tower shading the solar panels at LBV3 and installation of methanol fuel cells at each LBV. During 2016, a pipeline smart pig was run through the line to satisfy the commitment made to perform an in-line inspection within the first year of operation. Results from the inspection indicate no active internal CO2 corrosion in the pipeline. 4. CO2 PIPELINE INSTALLED DEVIATIONS FROM DETAILED DESIGN There were no significant deviations taken from the CO2 pipeline detailed design phase. The only clarification required from the BDEP was that no chemical injection facilities (e.g. methanol) were ever installed, as the risk of hydrate formation/corrosion was managed completely by adequate drying of the CO2 stream via the triethylene glycol (TEG) dehydration unit below the winter water content specification described above.

10 APPENDIX A: QUEST PIPELINE PELINE FIRST FILL PROCEDURE Refer to the document Quest Pipeline First Fill Procedure.pdf for the operations steps required to fill, and pressure up the pipeline.